When I was broke, I used to wish fervently for a windfall of cash. I mean, I think we all do that, but I took it to a disturbing level. If only some wealthy, unknown relative would leave me a fortune in his/her will. If only my limited edition Harry Potter watch would sell for thousands on eBay. If only I would be recognized for my random skills and paid fifty times my annual salary!
But guess what - none of those things ever happened (or ever will). And even if I had found a way to get my hands on tons of money, I still would have been broke.
I used to whine every payday, "I just need more income! I can't possibly find any place to cut!" And while more income is never a bad idea, I was too dumb to realize that it wouldn't have helped me a bit. It also infuriated me when my dad would tell me this. Multiple times. Usually while handing me money to cover one of my many overdraft fees.
It's funny to look back now and realize how much work it was to stay ignorant about money. I had to suspend reality, lie to myself, blame everyone I could think of (especially the bank), ignore the obvious, and actively refuse to keep track of my finances. All that effort before I spent a dime. It's exhausting!
Stupidity in Action
I know I hate on my ex-husband a lot on this blog, but he's my easiest example of the way I used to do things, combined with a complete inability/unwillingness to change. As much as I pick on him, it's never done without the disclosure that I was exactly like this in the not-so-distant past.
So the ex got a check on Friday for $18,000. Where did it come from, you ask? STUPID MISTAKE #1: He changed jobs and decided to cash out part of his retirement. Luckily, as a state government employee who started before budget cuts, he will still have a pension that pays 70% of his working wages in retirement. For life. (Yeah, I'm jealous.) Nonetheless, he cashed out what would have been a lump sum payment that had ten more years to grow before he is eligible to retire.
Why take the money? Is it for something terribly useful, like paying off his ton of debt?
Um, no. STUPID MISTAKE #2: So far, he has purchased a new cell phone, a new computer, and clothes for himself. He swears he's going to pay off his car, but from past experience I can tell you he'll buy another car within three months. I'm just crossing my fingers that he'll give me some money to buy school clothes for Jay before all the money is gone. If not, I'll try to post video of the throwdown.
Am I Any Smarter?
If I became $18,000 richer, I can tell you exactly what I would do with the money. I would pay off my car and remaining credit card debt. I would buy bedroom furniture, which I have lived without for nearly two years now. The rest would go into my emergency fund and Roth IRA. Then I would use the $700 a month I was no longer paying toward my car, Roth, and debt to start knocking out my student loans. I would be debt free in about 6 years.
At this point in my life, I have an exact plan for a potential windfall despite knowing it's not going to happen. Why? Because I still like to daydream, but instead of thinking of all the crap I could buy, I prefer to dream of a life where I'm not enslaved by payments anymore. Boring? Yep, but I'll take boring over broke any day!
I Talk Too Much. What's the Point Here?
The point is, you shouldn't waste a lot of time waiting for your financial ship to come in. Instead, spend your time learning to live with the money you have right now. If you can't find a way to make it with the income you've got, you won't be prepared to make wise decisions when/if that amount increases.
If you are lucky enough to receive a large sum of money, please send it to me think beyond today when you're deciding how to use it. Sure, a new TV would bring you a little joy. But if you're struggling with debt, any joy you feel will be smothered by that disgusting feeling of panic that sets in every time the phone rings or the mail comes. Instead of thinking of money as a tool to get more stuff, think of it as a way to get the things you can't buy in a store.
Are you smart when it comes to money? What would you do with an extra $18,000?
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